Henry Tucker writes:

The Futures Company has recently released the latest edition of Global MONITOR, our large scale syndicated future-focused Insights Programme. Global MONITOR’s analysis is underpinned by a survey of 27,000 respondents in 21 markets, and its research underpins much of thinking about social, cultural, and consumer change. Over the next few weeks we’ll be running a series of blog posts on themes from this research.

One of the most important themes of Global MONITOR 2011 is about consumer volatility. Three years into the financial crisis, those in richer nations have experienced long periods of austerity, unprecedented since the last World War. Eleswhere, pressures of growth are causing their own problems, from pollution to poisoning, in the case of China’s food scandals. This has made consumers feel both vulnerable and vigilant. And some of the data are striking:

• 42% agree that they ‘usually buy the cheapest product available’
• 51% of consumers, globally, agree that they are making more of an effort to buy less than they did before.
• 62% agree that ‘the world feels like an increasingly hostile and uncertain place’ (a high level of agreement for such a strongly worded question).

These tensions are expressing themselves culturally as well as economically. In most markets, the proportion of those agreeing with the statement ““I appreciate the influence other cultures have on our way of life in this country” has fallen quite sharply over the past two years. People are drawing in.

What we’re seeing as a result is that consumers are becoming as self-reliant as they can, reducing their exposure to an uncertain world wherever possible. Of course, ‘self-reliance’ conjures images of people storing clean water and tinned food in their cellars, but the emerging trend is, instead, about networked reliance. People use social connections, both to find new information, to look for deals, and to lean on each other for support. As they do so, their expectations of what business should be doing for society have become sharper. The proportion agreeing that “Companies have a responsibility to help support the society in which they operate” has seen a significant jump year on year in many markets. It’s another layer of complexity that many businesses could do without in tough times. But get it wrong and consumers will punish you for it.

The picture at the top is from Global MONITOR, and shows people’s perceptions of how their countries are doing and also how they are doing.

Global MONITOR is an innovative, strategic, future-focused Global Insights programme for clients and agencies. It identifies the key dynamics shaping the world and the consumer marketplace, as well as potential implications for your clients’ businesses. If you want to know more about Global MONITOR, please call Simon Kaplan in the United States, or Deniz Erdem in Europe.

Andrew Curry writes:

I’ve been working on a Futures Company report on The World in 2020 for the last couple of months, and since I’ve end up doing much of the work in the evening I’m delighted to say that we’ve just published the summary edition, and the full version has just gone into production. The summary edition can be downloaded from our website, although registration is required.

The World in 2020 is the first in a series of ‘Futures Perspectives’ reports which we’re publishing over the next few months.

It takes a high level view of the big drivers which are shaping the world, and looks at some of the innovation spaces which may emerge as a result. Here’s are a couple of extracts:

The financial crisis of 2008 represented an ending, but not a beginning. We are in a liminal moment, betwixt and between, when there are more questions than answers, but when, increasingly, our assumptions about how the world works are open to challenge and interrogation. … Liminal moments such as this one can last a decade or more, before opinion coalesces around a new set of operating assumptions about how the world works.

Over the next decade, we’ll see much tougher resource constraints – energy, food and water, and resources will all be under pressure – as well as the continuing long economic shift towards Asia. Issues involving technology and inequality will also be influential. It will be harder to make money in the coming decade. As a result, businesses will have to rethink their approach:

The changing economic environment creates the dilemma of new yet alternative prospects for different types of customers. The emerging middle class across much of Asia and Latin America will be very different from the debt constrained consumers of Europe and the United States. Globally, the
costs of basics such as food and energy are likely to rise over the next decade, so discretionary income will be lower than some project. In the richer countries, the experience of recession will create demands for more social behavior from businesses.

Business critic Umair Haque talks of the “meaning organization” that builds “authentic prosperity.” As he writes in a blog post, “An isolated notion of ’profit’ is obsolete: it’s an arid industrial-age conception of a currency-focused construct that’s built to trivialize everything but what a firm owes its ’owners’.

Joe Ballantyne writes

We’re experiencing a fundamental shift in the global economy, as wealth moves from West to East. As Asia and the Middle East assert themselves as the brightest prospects on the global landscape, in some ways we’re witnessing a return to the 16^th–19^th centuries, when the Chinese and Indian economies dominated world trade.

The scale of the shift is huge. In 1950, America was responsible for 27 per cent of the world’s GDP. China accounted for just 4.5 per cent and India, 4.2 per cent. Fast-forward to 2050 and the picture will look very different: forecasters say China will then be about to become the biggest economy in the world.

This economic shift, and the large implications for European businesses, was the subject of a recent report, Looking East, produced by The Futures Company for HSBC. The report included extensive analysis of the main drivers of change affecting the global economy to 2020, as well as a number of in-depth interviews with experts and businesspeople in a number of European countries.

It can seem as though this story is now a familiar one. But the research uncovered some striking findings, some of which go against the grain of popular conceptions about the rise of Asia. I was most struck, as we wrote the report, by these three:

• The ‘global financial crisis’ isn’t really global at all – it’s a manifestation of a longer term economic realignment. While Western economies stagnated through 2009-10, Asian economies are increasingly “decoupled” from the US, and have increasingly influential trade partners in other parts of the world – notably Africa and south America. China and India have continued to expand rapidly while Japan and several European economies have slipped into near-depression.

• Asia is no longer just a source of low cost labour – it’s increasingly a source of high value innovation. The model whereby the West does the research, development and design and the East took care of production is anachronistic. Lines have been blurred – as a result of a huge investment in education, countries like India and China are world leaders in areas such as software design and green technologies, and their multinationals are reshaping industries such as energy, steel and car making.

• There’s more than one way of running a successful economy. It’s easy to assume that the Washington consensus – open borders, economic liberalization, and free movement of capital, privatization – is the only way to run a successful economy. But these are largely a legacy of the ’80s, and an alternative model of ‘state capitalism’ developing in emerging economies. Companies are encouraged to exploit global capital markets and seek new opportunities abroad but are directed by the state and help to manage the domestic economy. This is most obvious in strategically important national industries: for example, 75% of the globally available crude oil reserves are in government hands. But it is also manifest in other industries: China Mobile, the world’s biggest telecommunications company, is listed on the NYSE, but controlled by a holding company owned by the government. In India, the central government has hundreds of state-run enterprises in diverse industries. Sitting behind the state capitalist model – in Russia and the Middle East as well as Asia – is the sovereign wealth fund, which invests globally for the benefit of the people but is managed and controlled by the state. These funds are increasingly active investors in the West.

The report – Looking East – was widely covered by (among others) the Financial Times, Wall Street Journal and Business Week and can be downloaded online (opens pdf), free of charge.The picture at the top of this post is from the China Digital Times, and is used with thanks.

Walker Smith writes:

A ‘new normal’ is emerging among consumers in the wake of the financial crisis and the recession:  ‘considered consumption’. This trend, which we noted last year, has now been reaffirmed by our latest Global MONITOR survey, which has just been released. One of the consequences is that the focus on price which was so strong immediately following the financial crisis has started to weaken.

Two data points stand out. The first is that 53% of consumers – taking a global average across all 20 countries – agree that ‘price is more important to me than brand names’ (down from 59% in 2009). The second is that 39% agree that ‘it’s best to buy famous brand names because you can rely on their quality’ (up from 34% in 2009).

Although these changes are small, they are notable. It can be easy to lose sight of the fact that consumers who are still tightening their belts also want the reassurance of name-brand quality.

And while there’s been a lot of talk about consumer frugality, what’s actually happening is that they’re practising prioritization. Consumers will stand up for the things that matter to them. But brands need to play their part as well. One of the other trends tracked by Global MONITOR is about interest in brands that practice social responsibility or deliver innovative wellness benefits. That’s been climbing, albeit slowly, over the past three years.

Global MONITOR is The Futures Company’s syndicated insights service. It encompasses an annual quantitative global survey of more than 27,000 consumers in 20 countries; the Global Energies, our consumer trends framework; and Global Streetscapes, our interactive database, continually refreshed, of consumer and brand behaviour. For more information, please contact Jennifer Childs in London or Simon Kaplan in the United States.

Alex Steer writes:

In Cape Town, ‘This is Africa’ is normally a sort of verbal shrug. It’s what you say when you see a road that’s more pothole than tarmac, or when a breakfast meeting finally starts at noon. In the last few months, though, ‘This is Africa’ has taken on a rather different meaning, as every media channel, and every brand, scrambles to ‘welcome the world’. This is Africa, and this is Africa’s World Cup.

The more optimistic see it as a chance for one of Africa’s most successful countries to show that the whole continent is coming of age. The more pessimistic see the World Cup as a cynical commoditisation of the idea of ‘Africa’: a cheap shorthand of Lion King imagery and broad cultural stereotypes lending a false exoticism to a Euro-centric and hugely commercial football tournament. The evidence for the prosecution rests on the shambles of ticketing, which either incompetently or viciously priced the vast majority of South African and African football fans out of attending matches.

If FIFA had paid more attention to its hosts, it might have avoided mixing bland pan-Africanisms with repressive corporatism. If brands are paying attention, there are a few deeper lessons they might draw about South Africa’s new consumers (the ones that didn’t make it to the stadiums) – lessons that even consumer research sometimes misses, to its cost.

The first is the need for specificity. Just as vague nods to ‘Africa’ will not wash, neither will any brand proposition that is not explicit about why it deserves attention. FIFA’s major sponsors are spending hundreds of millions on media and global brand campaigns – yet an increasing share of purchasing power in South Africa is in the hands of millions of low-income consumers who are driven by a fundamental conception of value. Brands thrive because they offer low cost, quality, safety and personal status. Global sponsor? Nobody cares.

The World Cup has also revived the lingering stereotype of the ‘new African consumer’: young, upwardly-mobile, black and with disposable income. This isn’t confined to advertising: hugely popular soap operas like Generations and Rhythm City are dazzling cocktails of social issues and fetishisation of commercial success that make Dallas look tame. These ‘new consumers’ look remarkably like the old ones, though, and there are some signs that the use of aspirational ‘black diamond’ images to sell existing products to new target audiences is wearing a bit thin.

‘Emerging consumers’ do not think of themselves as if they were playing catch-up with richer ones – or as if they were the same as each other. The smarter brands are segmenting these markets attentively, and looking for genuine insights. Asking the wrong questions can lead brands astray. Few low-income South Africans, for example, report having life insurance (24%) or investments (17%; see Global Monitor), in part because they do not associate these labels with membership of informal burial societies or stokvels (rotating credit unions), widespread in these markets. Insightful financial services brands are developing formal versions of these, tailoring their products to their new (not ‘emerging’) consumers.

If the World Cup has given us anything, though, it is the sound of the vuvuzela. Raucous, unfamiliar, disruptive, it’s an apt metaphor for the new South African consumer landscape and its challenge to brands. You can’t block it out, you can’t change it, and you’d be churlish to try. Sorry, brands of the world, but you’ll have to get used to it. This is Africa.

Alex Steer is a WPP Marketing Fellow and worked in our London office in 2009. He is currently a planner at Ogilvy Cape Town and rejoins The Futures Company in New York in September. The picture at the top of this post comes from the internet guide to Cape Town, and is used with thanks.

Alex Steer writes:

The numbers are changing constantly, but at time of writing, somewhere around 1,800 people (over 1,600 in Mexico) have been infected with the new ‘swine flu’ strain, and 103 people have died. The World Health Organization is coordinating the response, calling it a Public Health Emergency of International Concern.

When reading headlines like these, our thoughts naturally turn to the past and the future: where did this come from, and where will it lead? Our impressions of the past often inform the futures we imagine. We know about the possibilities of pandemic disease, even if few of us have experienced them. In 1919 between 20 and 100 million people worldwide were killed by an influenza pandemic; between 1982 and 2007 more than 2 million died of AIDS.

From flesh-eating viruses to ebola to winter vomiting, we are fascinated by the extremely unpredictable: the small outlying cause that transforms our lives; the sick man on the plane who brings down a city. Modern zombie lore is driven more by our fear of inexplicable pandemic outbreaks than by our belief in voodoo. (If you don’t believe me, watch 28 Days Later, Shaun of the Dead and Dead Set in succession. But don’t do it late at night.)

Pandemics, unlike zombies, have full and active social lives. Even events which seem radically unpredictable have driving forces, many of which don’t need a microscope to be seen. They range from urbanisation to the dense migration networks and transport systems which increase each infectious person’s sphere of influence; from healthcare policies which exclude uninsured low-income workers from care to lumbering organisational structures which make it hard to close roads or supply drugs at short notice. It takes a whole range of forces, not just a few strands of RNA, to make a pandemic.

Our own stories also drive our behaviour. In the hour before this post was written, 24,000 stories containing the word ‘swine flu’ were indexed by Google News. This morning airlines and hotel chains saw steep declines in their share value. Newspapers carried photos of travellers at UK airports wearing masks.

Swine flu may or may not go pandemic, but so far it isn’t even close. Each year 3-4,000 people in the UK die of normal-strain influenza. Our response is out of all proportion to the clinical risk. It reflects our fascination with the pigs-might-fly rareness of new diseases, and our unwillingness to grapple with the other factors that affect how, when, and where people get sick.

The picture of that childhood game of chance, “Pass the Pigs”, was borrowed, with thanks, from Kaptain Kobold on Flickr.

Giles Powdrill writes:

Since 2004 The Futures Company has worked with Aviva, one of the world’s largest insurance companies, on an annual survey focussed on understanding consumer attitudes to saving and investing. In total, more than 100,000 people have taken part in the survey since its inception. Geographically, the scope has grown year on year from 11 countries in 2004 to the 25 covered in 2008.

2008′s global survey was also topped up by an additional omnibus survey of key tracking questions in six markets, to understand how attitudes were changing as the credit crisis intensified, in late October 2008.

The results formed the basis of a recent speech given by Amanda Mackenzie. Aviva’s Group Marketing Director, at Chatham House (opens in pdf). To summarise some of the main findings:

Short termism – In 2008, the majority of people surveyed, in every market, said that the short term (within the next 5 years) was the most important timescale for them when thinking about savings and investments and the importance of this short term context overall has been a growing trend since the survey began.

Financial vulnerability – People feel financially exposed. The 2008 survey revealed that across the markets surveyed only one in four people felt that they had enough savings or investments to cope with the unexpected. Although this sentiment was felt most strongly in many of the Central and Eastern European countries, the omnibus research in October showed that feelings of vulnerability in more economically mature countries like the US and Germany have increased noticeably over the preceding nine months.

Aversion to risk - Less than a third of those interviewed in 2008 agreed that they were prepared to accept a higher level of risk for their savings in return for a higher possible return and although this figure had remained consistent across the five years of core research, the omnibus survey showed evidence of this risk aversion strengthening in the more mature economies since the credit crunch took hold. The research has highlighted consistently that when people think about financial returns from their savings they tend to prefer products which offer safer or guaranteed options over those which offer the highest or most competitive returns.

Barriers to saving - The greatest reported barriers to saving more have consistently been lack of affordability and existing debts, however lack of trust in financial institutions as a determining factor has risen dramatically over the course of this year. For instance only 8% of respondents in the US cited it as a barrier in Q1 2008 but this had then risen to 25% by Q4. Over the same period it rose from 15% to 27% in Ireland and from 13% to 22% in the UK.

Retirement concern – In almost every country surveyed the majority of pre-retired people said that they were worried that they wouldn’t have enough money when they retire to provide an adequate standard of living, and this has been the case since the survey began. However, significantly fewer people in most countries said that they were actually regularly setting aside money for use in retirement (despite also acknowledging that saving or investing regularly was the most practical way to secure a comfortable retirement). A mismatch between anxiety and action which creates some potentially worrying pension provision gaps.

Working later – One response to this potential lack of retirement provision, from a consumer point of view at least, may lie in simply working until later in life. In fact, rather than seeing this an unappealing prospect, in 2008 the majority of pre-retired people agreed that they would like to work, either full time or part time, after the usual retirement age. There was considerable geographical variation in answering this question though; the more established Asian markets such as Hong Kong, Singapore and Taiwan expressed the greatest desire to carry on their employment into their later years whilst those in Continental Europe (France, Germany, The Netherlands and Belgium) were least enamoured with the idea.

Countries covered in the 2008 research: Hong Kong, Singapore, Taiwan, China, Russia, Ireland, India, Australia, Romania, USA, Italy, Lithuania, Turkey, UK, Sri Lanka, Poland, Canada, Spain, Czech Rep, Malaysia, Hungary, Belgium, Netherlands, Germany, France.

A summary report of the key findings from the research has now been published and is available for download on Aviva’s website.

Tom Ding writes:

When I discovered last week that my brand new phone gives me unlimited Google Maps on-the-go, I had one of those ‘The Future Has Arrived’ moments, able to locate the nearest pubs and bus stops at a glance. Which got me to thinking about the different functions of a map, and how cleverly Google has partitioned them. You see, Google Maps is useful indeed: It can be a Sat Nav in your pocket or a route-finder on your PC and it has an interface perfectly suited for such quick tasks.

Perhaps though, we should regard it as the latest evolution of the 1920s ‘wrist-mounted, wind-up Sat-Nav’ shown in the picture at the top of this post. Google Maps gives you no context. It is great, so long as you know exactly where you want to go to. It is a road map, not an atlas, and definitely not a globe.

And this is where Google Earth comes in. Here, exactly the same data has been used for something completely different, and this time it is all about looking, rather than finding. Instead of the watch, I think of Google Earth as being a modern equivalent of the Gallery of Maps in the Vatican- somewhere that you go when you cannot see a place first-hand, somewhere that you could easily lose a few hours and somewhere that not enough people know about.

And Google Earth is getting better. We are now all free, in a Wikipedia-esque spirit of collaboration, to hack the program, at least a little bit, and create our own ‘layers’ dedicated to whatever topic we choose. Just this week, someone has published a layer called “Crisis in Darfur“. There is a layer of “Lighthouses in New Zealand” and another of Frank Gehry buildings. With all of this within a couple of clicks reach, I can’t help but feel like Google is biding their time here- waiting for their user-generated library to reach a critical mass before they tell the world about it.

By then, it will not just be an old fashioned globe, but an encyclopedia inside a globe. We will be able to visually explore almost any subject by geography, by topic and by time. And then, well, then the future really will have arrived.

Andrew Curry writes:

I chaired a session this week at the Building Futures ‘Futures Fair‘ at the RIBA in London at which Reinier de Graaf, of the architectural practice OMA, talked about the development of Dubai – and some of its implications. The city has grown (been grown) from nothing in 15 years, and every significant architectural practice in the world, OMA included, is building something there. de Graaf described the city as a “multitude of competing theme parks”, as the “monotony of the exceptional”. He added that “there are as many billboards as buildings, and the billboards hold the promise of the finished city”.

The city is – famously – building out into the sea, and before long more than half of the population of Dubai will be living on sea rather than land. This isn’t because of a shortage of land, for there are miles of desert inland. de Graaf observed laconically:

One prefers to make projects in the sea, because they are more expensive and more difficult, and therefore more marketable, because one markets their difficulty.

But this isn’t just a story about urban ostentation. The development of Dubai followed a long-term decision by the Emirates to reduce its dependence on oil, and the last year in which oil contributed more than half of national revenues was in 1985. The three property companies which are building Dubai are each half-owned by the UAE Royal Family, and the men who run them all hold positions in the Emirates government. Property is now one of the Emirates’ biggest exports, and its property companies are now building in all of the fastest growing cities in the world, from Morocco to the Philippines. As Reinier de Graaf noted, ‘the Dubai model’ represents a challenge to our received wisdom that democracy represents the best guarantee of economic prosperity.

Joe Ballantyne writes:

Back in the late 90s, and even more recently, globalisation was all the rage. Some people thought this was a jolly good thing and it would make us all rich and free, while others thought it was a really bad thing. which would lead to greater poverty and environmental damage. Either way, almost everyone agreed that we were careering towards a brave new globalised world, ruled by the free flow of capital between nations, and characterised by global institutions and global flows of people and goods.

Fast forward a decade, however, and things start to look quite a bit different. Countries like India, Russia and China are much wealthier and more powerful than ten years ago, the expansion of international groupings such as the EU seems to have all but halted, and the ongoing drama of the credit crunch suggests that financial deregulation has reached its limits. Protectionism is a recurring theme in the Democrat candidates’ contest in the US, and the chief executive of Deutsche Bank was recently quoted as saying that he “no longer believes in the market’s self-healing power” – and when the head of a major bank starts saying that financial markets need some sort of state intervention, you know something’s up. The public seem to think so: most of us admit a growing suspicion around the role free markets in the economy.

So how did the global theorists – from both the left and the right – so misjudge globalisation? There’s a whole thesis to be written on this, but some pointers could be:

• Many of them were working in internationally-focussed institutions such as universities or global banks – which probably blinded them to the attitudes of the majority who weren’t globetrotting, post-national types.

• Many of them had come to believe the widely canvassed idea that financial power will always trump state power – where as in fact, nationalism is a tremendously strong driver of domestic politics and therefore of political change.

• The Brits in particular lived in a country which had probably gone further than almost any other towards developing a ‘post-national’ identity, embracing the market and minimising the role of national symbols such as the monarchy, religion and so on. But what happened in Britain wasn’t replicated elsewhere.

One of the things we say in futures work is that if the filters you see the world through are too strong, they act like the blinkers on a horse – and create blind spots which make it harder to see signs of change. It’s interesting to think of other blindspots our assumptions about the world might create for us.

The picture was taken by David Eppstein.

]]> http://blog.thefuturescompany.com/2008/04/24/blind-spots-on-globalisation/feed/ 1 thenextwavefutures David Eppstein, Containers, 2001